Hitting Extreme Fear, Is Bitcoin Still The Best Safe-Haven Asset Amidst Russia-Ukraine War?
2022-03-16 15:59:42
Should You Invest In Bitcoin During Russia-Ukraine War
What is the Fear and Greed Index?
Developed by CNNMoney, the traditional fear and greed index was used to measure two of the primary emotions that influence stock investors. As a tool used by some investors to gauge the market, the index is based on the premise that excessive fear can result in stocks trading well below their intrinsic values while unbridled greed can result in stocks being bid up far above their initial worth.
Alternative.me, a platform for optimizing connections between a variety of software and product alternatives, believes that the crypto market’s behavior is just as emotional as the traditional markets. Therefore, the website published the crypto fear and greed index.
According to the explanation made by Alternative.me, people tend to get greedy when the market is rising which results in FOMO (Fear Of Missing Out). By contrast, people often have the irrational reaction to sell their coins when seeing their investment in the red.
The crypto fear and greed index crunches the numbers into a simple meter from 0 to 100. Zero means "Extreme Fear" while 100 means "Extreme Greed". The former can be a sign that investors are too worried and a buying opportunity. However, when investors are getting too greedy, the market may be due for a correction.
As of March 14, the Bitcoin fear and greed index hits 23, which represents "Extreme Fear". Does this mean now is the good time to buy Bitcoin?
Bitcoin As a Safe-Haven Asset During Russia-Ukraine War
Cryptocurrencies have held up better than stocks since the Russia-Ukraine War started. Aggressive sanctions have cut Russia off from access to the global financial system and have increased bets that some countries and institutions will start to look more seriously at alternate ways to move money around the globe. The Bitcoin network stands to benefit.
Following the speculation that sanctions and a collapsing rouble would drive Russians into cryptocurrencies, the Bitcoin price surged as much as 20% at the start of March and briefly topped $45,000, according to Gate.io, a trusted platform for buying Bitcoin.
At the same time, the number of trades exchanging Russian rubles for Bitcoin has spiked since the invasion, according to data from Arcane Crypto. Though it's still just a small portion of global transactions, it supports a broader narrative that Bitcoin holds real value.
Marcus Sotiriou, an analyst at GlobalBlock, commented that "We can definitely see that some Russians are using Bitcoin as a hedge and to protect their savings", which bolsters "the idea that Bitcoin can act as digital gold".
However, the largest cryptocurrency failed to provide crypto holders relief for a longer time. Bitcoin has been fluctuating between $38,000 and $39,000 over the past few days, and at the time of writing, Bitcoin price live on Gate.io is still struggling at $38,000.
David Duong, head of institutional research at Coinbase Global Inc agrees, credits Bitcoin’s rally at the beginning of this month to technical factors. “The invasion of Ukraine forced markets to liquidate heavily at the end of last month.” While positioning has helped Bitcoin market retrace, it remains unstable.
What is the Fear and Greed Index?
Developed by CNNMoney, the traditional fear and greed index was used to measure two of the primary emotions that influence stock investors. As a tool used by some investors to gauge the market, the index is based on the premise that excessive fear can result in stocks trading well below their intrinsic values while unbridled greed can result in stocks being bid up far above their initial worth.
Alternative.me, a platform for optimizing connections between a variety of software and product alternatives, believes that the crypto market’s behavior is just as emotional as the traditional markets. Therefore, the website published the crypto fear and greed index.
According to the explanation made by Alternative.me, people tend to get greedy when the market is rising which results in FOMO (Fear Of Missing Out). By contrast, people often have the irrational reaction to sell their coins when seeing their investment in the red.
The crypto fear and greed index crunches the numbers into a simple meter from 0 to 100. Zero means "Extreme Fear" while 100 means "Extreme Greed". The former can be a sign that investors are too worried and a buying opportunity. However, when investors are getting too greedy, the market may be due for a correction.
As of March 14, the Bitcoin fear and greed index hits 23, which represents "Extreme Fear". Does this mean now is the good time to buy Bitcoin?
Bitcoin As a Safe-Haven Asset During Russia-Ukraine War
Cryptocurrencies have held up better than stocks since the Russia-Ukraine War started. Aggressive sanctions have cut Russia off from access to the global financial system and have increased bets that some countries and institutions will start to look more seriously at alternate ways to move money around the globe. The Bitcoin network stands to benefit.
Following the speculation that sanctions and a collapsing rouble would drive Russians into cryptocurrencies, the Bitcoin price surged as much as 20% at the start of March and briefly topped $45,000, according to Gate.io, a trusted platform for buying Bitcoin.
At the same time, the number of trades exchanging Russian rubles for Bitcoin has spiked since the invasion, according to data from Arcane Crypto. Though it's still just a small portion of global transactions, it supports a broader narrative that Bitcoin holds real value.
Marcus Sotiriou, an analyst at GlobalBlock, commented that "We can definitely see that some Russians are using Bitcoin as a hedge and to protect their savings", which bolsters "the idea that Bitcoin can act as digital gold".
However, the largest cryptocurrency failed to provide crypto holders relief for a longer time. Bitcoin has been fluctuating between $38,000 and $39,000 over the past few days, and at the time of writing, Bitcoin price live on Gate.io is still struggling at $38,000.
David Duong, head of institutional research at Coinbase Global Inc agrees, credits Bitcoin’s rally at the beginning of this month to technical factors. “The invasion of Ukraine forced markets to liquidate heavily at the end of last month.” While positioning has helped Bitcoin market retrace, it remains unstable.
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